This excerpt taken from the CRNT 6-K filed Sep 24, 2007.
APPROVAL OF THE COMPANY'S DIRECTORS AND OFFICERS LIABILITY INSURANCE
The Companies Law and our Articles of Association authorize the Company, subject to shareholder approval, to purchase an insurance policy for the benefit of our directors and officers for liability by reason of acts or omissions committed while serving in their respective capacities as directors or officers of the Company.
The Companies Law provides that a company may not enter into an insurance policy which would provide coverage for the liability of a director or officer for: (a) a breach of his or her duty of loyalty, except if he or she acted in good faith and had reasonable cause to assume that such act would not prejudice the interests of the Company and is otherwise permitted by law; (b) a breach of his or her duty of care committed intentionally or recklessly, except when it is committed only in negligence; (c) an act or omission done with the intent to unlawfully recognize personal gain; or (d) a fine or monetary settlement imposed upon him or her.
Under the Companies Law, the insurance of directors requires the approval of our Audit Committee, followed by our Board of Directors and then by our shareholders.
During the period from July 9, 2006 through July 8, 2007, we maintained a directors and officers liability insurance policy with a coverage limit of $10 million. The annual premium in the amount of $111,000 was borne by the Company.
Our Audit Committee and Board of Directors have approved the purchase of a directors and officers liability insurance policy from unaffiliated parties for the period commencing on July 9, 2007 and ending on July 8, 2008. The coverage under the policy will be $20 million, and the annual premium in the amount of approximately $165,000 will be borne by the Company. We are proposing to increase coverage under the proposed directors and officers liability insurance policy in comparison to the previous policy in order to have coverage for our directors and officers we believe appropriate for the risks associated with holding such positions, taking into account the Company's growth in business and market capitalization. The shareholders are thus being asked to approve the purchase by the Company of such insurance coverage for the benefit of our directors as required by the Companies Law.
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon is necessary for the adoption of the foregoing resolution.
It is proposed that at the Meeting the following resolution be approved and adopted: